When I started out on the journey of The Merc I promised myself that I would check my ego and share all the good and bad of the renovation with you guys. After all, its not all sunshine and rainbows all the time right? Well one of those moments is here (already!?! WTF!?) and as stressful and embarrassing as it is to share I’m baring all.
As I’ve talked about numerous times already, we worked on this thing like crazy before we bought it. We did allllll the tests, and spent alllllll the money so that we knew what we were going into.
All except one. Yep.
Dang it.
This is going there.
But first you need some info that I haven’t shared yet.
We knew going into the purchase of The Merc that the seller had a hard deadline for closing. Everything has to be finished April 1 because his note to the seller (that he bought it from a year prior) was due. When we stared everything in September, April 1st seemed like an eternity away. A target as easy to hit as the broad side of a barn. There was no way that it wasn’t going to happen by then. But then as more testing and more requirements and more people got involved the date kept inching closer. We realized at the beginning of March that there was no way that we would be able to close with the bank before that date. So using a combination of our life savings, equity from the sale of our house, and a little bit of seller financing we bought The Merc outright, without having to worry about the bank financing. This gave us plenty of time to get the construction loan ready to go. When we closed on The Merc I thought the construction loan was just a week or 2 behind.
Ha.
Ha ha.
This is where it gets complicated. The one test that we didn’t do before we closed with the seller was a Phase 1 Environmental test. A Phase 1 is a test that covers an investigation of the current and past history and uses of the property in question. What was previously on the site? What could past usage have done? Did any usage contaminate the soil or groundwater underlying the site? How about the current operation? Are any petroleum, hazardous materials or chemicals in use at the site, or have they been released to the air, soil or groundwater at or near the site?
Basically is there anything on the site that could cause potential environmental issues.
From 1928-1945 there was a small gas pump outside, so the concern is that the underground storage tank was still there.
I spoke with the city (they widened the road and added the streetscape about 10 years ago) and they said there was no way that the tank was still there. I spoke with the previous owner (like the long time lifelong owner) and he said it wasn’t there, but there is no legal documentation that the tank was removed. Prior to the 1970’s it wasn’t required to disclose that info to the state of Utah, so its not documented if it actually is there or not.
In order to get our construction loan we had to have a Phase 1 test done. Everyone saying that it isn’t there isn’t good enough, it needs to be proven.
So why do we need it? When environmental issues are discovered it is the legal property owner’s responsibility to remediate it. It doesn’t matter when the issue was there, if it hasn’t been dealt with, it is the owners obligation to handle it. So in our case, it doesn’t matter that the tank hasn’t been in use since 1945, or that the ownership of The Merc has changed hands half a dozen times since then, because we are the owners we are liable for it.
The reason that the bank requires the testing is because if there are issues and the property owner stops making their payments, the bank will not file for foreclosure because then they would be liable for the remediation. They would be out the amount of the loan + whatever the cost of remediation would be.
This is a fairly new practice that banks are requiring and I completely understand why.
We had our phase 1 testing done in mid April and it came back inconclusive. The company doing the testing was hoping that the city utility lines would intersect the section of grass where the tank would be if it were there. When the city marked the lines they did not cross that area.
Inconclusive.
Dang it again.
The Phase 1 also determined that the brick side of the building was used as a service garage for approximately 10 years. During the 40’s there were some pretty volatile chemicals used as degreasers. Over time as they break down their toxicity stays high, so they also wanted to run a sub-slab vapor test on the interior.
I was fine with it and not worried until one night at 3 am I woke up unexpectedly panicked. I did what everyone in that situation does when the wake up with fears at 3 am, I started googling. And like the person that googles info about a hangnail and finds out that they have terminal cancer, I learned that needing to do a phase 2 meant that it would cost millions of dollars and would entail tearing out Santa Clara Dr and replacing all of the dirt within 5 yards of where the tank was, and removing all of the concrete and 9 feet of dirt on the interior thus making the walls crumble into oblivion and the entire property being leveled. So basically millions of dollars for a weird shaped lot of new to me dirt. As fun and thrilling as that sounds, its not quite the look I was going for.
In all reality though I was absolutely terrified, I haven’t thrown up from stress since Court was in his addiction. It was not a fun place to be and it wasn’t until after I spoke with the man that did the phase 1 did I understand that everything was going to be a-ok even if the tests came back positive. I was not going to bankrupt my great grand children.
So this is where we’re at. They collected samples for the Phase 2 today (which is why this post is going live so late!) and I feel like it is hopefully a lesson learned the hard, but not brutal way. I’ll keep you guys posted, and I’ve got a whole post coming up about it, just so when someone googles, hopefully they aren’t going to give themselves a coronary.
So here I am in all of my embarrassed glory. Should we have done the test beforehand? Of course. Would it have changed anything? That’s yet to be determined but I’m feeling pretty good about it. Have you ever dealt with environmental testing? If so how did it turn out?
Environmental testing is the pits, but sometimes you can get the local government to pay for it, id definitely check into that ! Will be praying for you all!
Hang in there – remember that your place is going to be amazing! It will happen!
Ahhhh… prayers everything will be okay!!
🙂
Contact Trump. He’s willing to help the American people against the government and the EPA. (just a little humor) Hoping all goes well. Love following your journey and love how honest and open you are. And as your husband says, Merc Perc….
Whew, so stressful! But you’ve got God and guts, girl! Praying it goes well with Phase 2!
I don’t see this as embarrassing at all. Nobody goes in knowing all the answers, but you are ACTUALLY DOING IT instead of just dreaming about it. Sharing these setbacks is inspiring because it shows me how a real person comes up with a real solution to make a really incredible space. I want to see the how, not just the glossy after. The how is where the magic is.
Yes! I agree with this comment wholeheartedly!!! We love the “how”!
Can anyone tell me why 1/2 the time that I open the site the “header” on the left covers a good portion of the text making it hard/impossible to read? Is it something I am doing or can fix on my end to actually be able to read the post?
Thanks, inter-web friends for any help you might have for this not so savvy user!
I wonder if it has to do with the size font you’ve set your computer at? If you’re like me and try to make the font as large as possible, due to middle aged eyes, this might be the reason.
It might depend on something as simple as where on the page you have rested your cursor. Also, there may be an X or “close” somewhere in the field (or outside of it; they’re sneaky) that you aren’t seeing and need to click. Finally, if this is an ad, you could look into ad-blocking software (eg AdBlock, which is free to download) but the field itself may still intrude. Those are my best guesses.
Things WILL work out. They always do. Every home buying purchase comes with its quirks and surprises and you should not feel at all embarrassed. Thank you so much for being willing to share with us!!!
If you’ve had to have all this testing etc done why didn’t the previous owners have to have it done and deal with it when they bought it a year ago? Did regulations change that much in that amount of time?
So interesting! I hope the tests come back negative. I think it’s great that you’re sharing the story behind this process. Good luck!
Why was this required testing not already done by the person you bought the Merc from, when they bought it? Has the requirement only come about in the year since they bought it?
Everything will turn out just great! Time and patience. I am rooting for you here at Titan Ladders
Aw man! That does sound super stressful and drawn out! I just listened to a very similar story on the Moth (podcast). So I’m feeling like this must happen more often then you hear about.
Hang in there!! Everyone is routing for you guys! You’re amazing!! <3
Environmental testing is very common in commercial construction of historical buildings / sites. However, I am sure you would have still bought the property. It is gorgeous! Like everyone else said… Hang in there and get multiple quotes on any removal that is needed.
This whole process is so totally stupid. We had friends that had a similar situation and had to pay tons of money to remedy. As it turns out the city they lived in changed the rules a few years later because they realized that even if there were underground gas tanks any residual chemicals break down over time and become non toxic Did they reimburse any of those who were forced to do the cleaning. NO!!! The problem is dealing with bureaucrats who know a little but presume to know it all. They have the power and so there’s no reasoning with them. Interesting to know this happens in another state. Good luck to you. Love the idea of the warehouse.
Yes, I have researched my fingers to the bone on this. My dad had a gas station that was built in 1940 and the city wanted him to get everything checked. He missed out on the “grants” for small business owners, so it was out of pocket for my parents. We started process and found the old 1940 tank was fine, but the newer tank from the 60’s had leaked – both pulled out and taken away. Luckily, it wasn’t that bad of a leak and the out of pocket for my parents was about 20k… When my parents passed, the lawyer assured my sister and myself, that my parents had done everything to the letter and nobody could come back on us for more money. Good luck….prayers all is just fine.
Don’t worry everything always has a way of working out after all you’re not just sitting around waiting for things to happen. God is there watching over you and your family.
I don’t see this as embarrassing! You can’t EVER know everything, especially when it comes to real estate. I feel your stress though – hang in there. You have the strength and the guts and Court to get pass this. 😉 Thanks for sharing this journey with us.
Mandi,
I pray a supernatural miracle that it will all come through without any problems.
Keep the faith (isn’t that what faith is, believing what you can’t see; heck everything we do, we do in faith!)
You know that hazardous waste cleanup is what Larry has been doing the last 25 years? It will work out.
It might be worth contacting the State of Utah Brownfields Program and see if they can help in any way. Brownfields is a program specifically established to help clean up properties with environmental issues get cleaned up and back into use.
https://deq.utah.gov/ProgramsServices/programs/cercla/brownfields/index.htm
Trust God. We are also about to jump off a cliff with no idea of what’s below us and ALL the contingency money gone. This is the mantra I keep repeating to myself, trust God. And keep a paper bag handy for hyperventilating, vomiting, etc.
Mandy, please read this comment. My husband’s company deals on a daily basis with environmental issues like yours. Contact your state EPA. There should be funds available to remove a tank if it is still there. The person who put it in ( and their insurance company) is responsible for the tanks. A title search should tell you who that is.
I met you at Haven a few years ago. If you have any questions, my husband can probably answer them. Send us an email at my blog address.
Thanks for being honest with us. We are all there. We get it.
And btw, this made me chuckle. I love how you make fun of yourself.
“So basically millions of dollars for a weird shaped lot of new to me dirt.”